Minutes of the RBA May 3rd policy meet definitely lack explicit easing bias. Minutes reveal no sense of urgency for the Bank to cut rates, the Bank debating the merits of cutting or awaiting further information. Hence a June cut should be off the agenda and a July cut is a lower probability as well, but rate cut in August still on cards.

This is normal practice in the press release and minutes released immediately post a rate cut and does not imply that the rate cut was of the ‘one-and-done’ variety. The extent of the downgrade to the inflation forecasts in the SoMP strongly suggest that further easing is likely.

The minutes highlight the Bank’s uncertainty over the inflation outlook, and its concerns about the second-round impact of lower inflation on wages growth. As the SoMP suggested, the Bank was clearly disconcerted by the broad-based nature of the weakness in non-tradables inflation.

"We continue to expect further monetary policy easing given the soft inflation outlook, and look for another 25bp cut in the cash rate to 1.5% at the August meeting.” said ANZ in a report.